If you want to invest in gold but aren’t sure if this is the right time, it is important to understand certain points. First, remember that the price of gold has been constantly going up for the past 50 years, which goes to show that it’s one of the most stable and secure forms of investment in the market today.
Also, understanding what influences the price of gold will help you know if today is the right time to invest or not. Here are the main factors:
Supply an Demand
Gold reserves on our planet are limited. In fact, there is only a specific amount of gold being extracted at any given time. When countries like China and India buy tons of gold for their own reserves, the price of gold immediately goes up. Also, when investors see the opportunity and start to invest large sums in Gold EFTs and other forms of gold, that also impacts the price of gold.
Economic & Political Turmoil
When the economy is unstable for whatever reason, stocks, bonds, paper money and real estate become very unstable investments as well. Gold tends to behave oppositely, in the sense that its price goes up when the economy is not doing well because governments and big investors are trying to protect their assets by buying more gold. This is why gold prices have been going up constantly since 2008, year of the beginning of the American crisis.
The situation in the middle east is also a big influence on the gold price. According to Gareth Smyth, a Financial Times correspondent in Tehran, “The rush to gold reflects both growing tension over Iran’s atomic activities and the destabilising economic policies of fundamentalist President Mahmood Ahmadinejad”.
Prosperity of Asian Markets
Asians (mainly Chinese and Indians) are known to be big gold buyers. Culturally, they buy gold jewelry to store wealth. When their economies are doing well, it creates more wealthy people. These people will massively invest in gold bars and jewelry. Asian banks are also known to buy large quantities of gold for their own reserves.
To learn more about the prices of gold, visit: http://gold-prices.info/
To leanr how to invest safely in gold, visit: http://invest-in-gold.net/